2015 Financial Year Results
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25 February 2016 To: ASX Company Announcements Platform BRISBANE BRONCOS LIMITED AND ITS CONTROLLED ENTITIES 2015 FINANCIAL RESULTS Please find attached the following documents in relation to the 2015 financial results for Brisbane Broncos Limited and its controlled entities (“the Group”): . Earnings Release . Appendix 4E – Preliminary Final Report . 2015 Financial Report . Independent Audit Report and Auditor’s Independence Declaration Yours faithfully Brisbane Broncos Limited Louise Lanigan Company Secretary BRISBANE BRONCOS LIMITED (ABN 41 009 570 030) EARNINGS RELEASE FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015 Brisbane, 25 February 2016 FINANCIAL PERFORMANCE Revenue Brisbane Broncos Limited and its Controlled Entities (“the Group”) recorded gross revenue for the 2015 financial year of $40,438,365 which is a 7% increase on 2014. Revenue was boosted by the increased Club Grant, incentives related to two home finals and growth in sponsorship, casual gate income and in-house merchandise sales. Mitigating the growth was a reduction in government funding for the Indigenous Programme compared to the prior year. Home game attendance was up 0.6% on last year, averaging 33,543 (2014: 33,355) reflecting a 13.4% increase in average season member attendance, 14.3% reduction in complimentary tickets and 2.3% reduction in casual gate attendance. Total corporate sales revenue grew 11.7%, inclusive of home finals related amounts. However corporate sales revenue for the regular season was largely in line with the prior year, with corporate attendances for the regular season down 3.4%. Membership numbers increased to 28,596 (2014: 28,517). Ticketed membership numbers grew to 19,893 (2014: 18,492). During the prior year, negotiations were conducted in relation to the renewal of the Suncorp Stadium hiring agreement, with the original ten-year agreement expiring at the end of the 2014 season. On 4 February 2015, the renewed Hiring Agreement between Brisbane Broncos and AEG Ogden (Brisbane Stadium Management) Pty Ltd as agent for Stadiums Queensland was signed. The terms of the renewed agreement incentivise the parties to grow game day attendances and are more favourable for the Group than the terms of the original agreement. The renewed agreement is for an eight-year term with a review date at four years. The 2015 result reflects the improved terms of the renewed agreement. Sponsorship revenues strengthened with 8% growth on the prior year inclusive of finals bonus amounts, website and Broncos Insider sponsorship. Sponsorship renewals included our Premier sponsor, Firstmac, for a further three-year term. The Institute for Urban Indigenous Health’s Deadly Choices programme grew their partnership with the Brisbane Broncos to step up to the Premier sponsorship category, strengthening an alliance which is advancing the cause of indigenous health. Our merchandise operation generated 29.2% growth in trading revenue during the financial year with sales boosted by two home finals and a Grand Final appearance. Non-trading merchandise revenues grew 15.7% with royalty reflecting improved consumer demand in line with strong team performance. -2- Interest revenue decreased by 18.3% to $0.5 million (2014: $0.6 million) due to a reduction in average interest rates offsetting the effect of an increase in the average principal amount being invested. The NRMA Insurance Brisbane Broncos NRL team has a proud history with a high benchmark set from past success. The 2015 season saw the return of foundation coach, Wayne Bennett, after six years coaching away. The on-field performance of the NRL team was outstanding with a strong run to the Grand Final. We were disappointed to fall short but will build on the experience and be stronger for it. The value and beliefs that have been instilled in our players from the 2015 season will hopefully hold us in good position for the 2016 season. We look forward to continuing the success of 2015 into 2016 and hopefully taking it one step further. Whilst our players were very proud of their achievements throughout the season on the football field, they are equally proud of their off-field commitments to the community as they continue to work hard to connect with fans, supporters and aspiring young players. Expenditure Total Group expenditure for the 2015 year was $36,666,365, an increase of $152,017 (0.4%) over 2014. A dissection of total expenditure is listed in note 6 to the financial statements. Total expenditure reflected business-as-usual without the impost of the significant restructuring costs incurred in the prior year. THE BOARD AND MANAGEMENT The Board recognises the dedicated efforts of the executive management team led by Chief Executive Officer, Paul White; General Manager Marketing and Commercial Operations, Terry Reader; Chief Financial Officer, Shirley Moro; Salary Cap Manager and Company Secretary, Louise Lanigan; Football Operations Manager, Scot Czislowski; and General Manager External Relations and Corporate Strategy, Jeff Van Groningen. We also recognise the dedicated efforts of Wayne Bennett in the role of head coach. Our outstanding team of employees continues to perform at a high level in keeping with the Broncos goal to become the premier sporting business in the country. THE YEAR AHEAD As part of the club's five-year strategy, the NRMA Insurance Brisbane Broncos aim to be a top four club, where on- field success - aided by strong memberships, sponsorship and home crowds - drives value for all shareholders and stakeholders. While finishing just a few seconds short of the ultimate prize in one of the best grand finals in modern history, the 2015 NRL team under Wayne Bennett demonstrated the success of that strategy, helping drive the club commercial results to record levels. While the business had continued to grow in the consecutive losing seasons of 2012-2014, it was clear that that growth could not be sustained without a winning NRL team, especially in front of home crowds at Suncorp Stadium. With the acknowledged best coach in the game and an even stronger and developing NRL roster, aligned with a strong leadership and commercial team, the club is again well positioned in 2016. -3- There will remain a heavy focus on the cost-effective delivery of the proposed new Broncos $25 million home at Red Hill, ensuring that the administration, football and community arms are all under the one roof for the start of the 30th year of our existence in early 2017. While a commercial loan has been factored into the funding model as a last- resort measure, the club will continue to work hard to raise all necessary funds, including a planned donor programme. Through the Australian Sports Foundation, tax-deductible donations can now be made to support the building project, game development and our award-winning community programmes. More upside will also come through leveraging the biggest social media supporter base in Australian club sport, utilising our digital assets to build on early success in merchandise, ticketing, events and corporate sales. While the investment in the club's new home is significant, it is made at a time when the club has never been in a stronger position commercially. It is also made while taking part in a NRL competition where all franchises will increase markedly in value through the record $1.8 billion TV rights deal for 2018-2022. Fox Sports, Channel 9 and Telstra have retained the free-to-air, pay TV and digital rights in an unprecedented deal which will also give viewers and consumers an unrivalled access to the NRL. Following an historic club funding deal struck with the NRL before Christmas, and now the subject of a Memorandum of Understanding, benefits begin to flow to the clubs from July this year as part of a Channel 9 pre-payment for 2016-2017. The year was also significant for the dedication and resilience of our CEO, Paul White, who suffered a seizure and was diagnosed with a brain tumour in July. Even when physically absent because of treatment, Paul continued to remain across the business and was involved in all major decisions. He continued to host select high value meetings. While his treatment continues, Paul's prognosis remains excellent and he has resumed his normal heavy workload. Like myself, Paul has been high in his praise of Broncos staff who took on an extra load during this period. Also outstanding was head coach Wayne Bennett who, while directing a committed playing and coaching group, reminded the club in 2015 of the high price of enduring success in one of the toughest competitions in world sport. BRISBANE BRONCOS LIMITED (ABN 41 009 570 030) APPENDIX 4E PRELIMINARY FINAL REPORT FOR YEAR ENDED 31 DECEMBER 2015 RESULTS FOR ANNOUNCEMENT TO THE MARKET Revenues from ordinary activities ($000) Up 7% to 40,438 Profit from ordinary activities before tax attributable to members Up 185% to 3,772 ($000) Profit from ordinary activities after tax attributable to members Up 208% to 2,562 ($000) Basic earnings per share (cents) Up 208% to 0.03 cent Diluted earnings per share (cents) Up 208% to 0.03 cent Net tangible asset backing per ordinary share (cents) Up 14% to 17.1 cents Franked amount DIVIDENDS Amount per security per security Final Dividend for 31 December 2015 0.75 cent 100% Total amount per share relating to the year ended 31 December 0.75 cent 100% 2015 Previous corresponding period: 0.5 cent 100% Final Dividend for 31 December 2014 AUDIT INFORMATION The financial statements have been audited and a copy of the independent audit report is attached to the financial